Is the US already in recession - did we ever leave?

We believe that the US economy has never left the “recession” and that the next wave of trouble is upon us. Late breaking news from Detroit indicates that General Motors is scaling back automobile production more than usual around the Christmas holiday (BTW Merry Christmas to all our readers).

We cannot spend our way out of trouble, and printing money will catch up to us soon. This is serious business but there is still time for individuals and families to prepare and minimize the pain.

Here are four suggestions – call them good advice and do something or ignore them and hope everything will return to how it once was.

Get out of debt

Increase your family inventory of food and household necessities (anything you do will be better than nothing)

Work with like minded individuals to organize your church or civic group so you can assist one another

Renew your faith and practice it. Faith is a great steadying influence and a source of inspiration when days are dark.

What are we waiting for anyway? How can being prepared harm us?

n his latest Breakfast with Dave note, David Rosenberg points to one sub-component of the durable goods report that sent a particularly scary signal.

The Congressional Budget Office and the Federal Reserve predict that going over the fiscal cliff would cause a recession in 2013, with Fed Chairman Ben Bernanke recently saying that the Fed would be unable to offset the adverse effect on the economy. He could have said the same thing about the fiscal drag that would be created by Obama's budget proposal.

Although Congressional Republicans rightly object to raising tax rates, they appear willing to raise revenue through tax reform if that is part of a deal that also includes reductions in the long-run cost of the major entitlement programmes, Medicare and Social Security. Although some Republicans would like to see revenue increased only by stimulating faster economic growth, that cannot be achieved without the reductions in marginal tax rates and improvements in corporate taxation that the Democrats are unlikely to accept. Raising revenue through tax reform will have to mean reducing the special deductions and exclusions that now lower tax receipts.

Thus, no matter much money Ben Bernanke creates, the US economy is not going back to robust growth in 2013. Creating more money will just increase inflation, and together with the continuing budget deficit will suck capital out of the US towards our creditors such as China and Japan.

In the long run, a recession is coming, like it always was. With bad policies in place worldwide, that recession will almost certainly be less painful if we get it over quickly, and don’t delay it into 2014 or later.

GM said it had 245,853 or 139 days worth of full-size pickup trucks at the end of November, an increase of more than 10,250 vehicles from October. At average GM truck pricing, the inventory was worth $7.5 billion.

The largest U.S. auto maker by sales is throttling back output even as rival Ford Motor Co. plans to increase North American production by 11% in the first quarter of 2013 over 2012 after posting a better-than-expected 6.4% increase over a year earlier in November U.S. sales.

Excluding the noise, and focusing only on real, non-noisy economic strength metrics such as New Capital Goods Orders (technically defined as the year over year change in Non-Defense Capital Goods Excluding Aircraft), a very different and far uglier picture emerges. In fact, the October Y/Y Plunge of -8.1% in this major indicator was the biggest drop since 2009...To summarize: according to one of the least susceptible to manipulation indicators of US economic strength and growth, the US economy is now in a recession.

Spain's agony deepens as the unemployment rate climbs and hunger stalks the nation.Argentina's reflections on the Spanish wreckage are more than just cautionary. They are echoes of suffering from those...